Rent reform: Common sense prevails on rent bidding

Shelter NSW supports the NSW Government’s goal to make the private rental system fairer, including the commitment to end secret rent bidding. However, we have had serious concerns about the proposal to deal with it.

On June 2, John Engeler, CEO and Cathy Callaghan, Senior Policy Officer Shelter NSW appeared before a NSW Parliament inquiry considering how the practice of rent bidding should be dealt with in NSW. The Bill attempted to address a current contradiction: where real estate agents or landlords cannot ask tenants to offer more than the advertised fixed rent but can, however, accept a higher offer made voluntarily by potential tenants. 

Our CEO John Engeler and sector colleagues outside the NSW Parliament after the inquiryConcerns planned reforms to ‘end secret rent bidding’ will introduce rent auctions

We were concerned that the Bill’s provision to allow for prospective tenants to offer a higher rent may trigger an ‘auction’ like process. During the hearing we noted our concern that a rent auction process would produce unintended (but easy to contemplate) consequences, undermining the very well-intentioned goals of increasing a sense of fairness and reducing stress within the rental application process.

At the hearing we literally sat shoulder-to-shoulder with the Tenants Union of NSW and NCOSS, providing statements and fielding questions from the Committee. We thank the TU especially for its leadership and guidance on this matter.

Shelter NSW called for the outright banning of rent bidding. Where the price (the advertised rent) is the price. What could be more simple and more transparent?

We recommended however, that in the event the Bill was to proceed, that there had to be some focus on constraining the worst elements of an auction process. Overall, we recommended  to the Committee that the incoming Rental Commissioner would be well-placed to explore these types of concerns with the real estate sector, tenant advocates and the community sector.

We were relieved to hear the NSW Premier announce that the Bill (contain other useful elements like portable bonds) would proceed, minus the rent bidding elements, and that the incoming Rental Commissioner would be asked to review the rent bidding issue.

As Shelter NSW CEO John Engeler noted in this media story“We thank the NSW government for taking the time to reconsider the best way to improve transparency in the application process and look forward to consulting further with the Rental Commissioner.”

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